What SCA “Really” Means For Cosmetics Companies, Part I

The other day, the Campaign For Safe Cosmetics published a statement at their website called, “The Safe Cosmetics Act of 2010: What it Means for Cosmetics Companies.” I noticed that they left out quite a few very important requirements that are clearly spelled out in H.R. 5786 — things that all cosmetics companies, including their Compact signers, need to know. Rather than put them all in one mega-post, I’m dividing up into digestible pieces. Let’s look at what they say in Point No. 1:

CFSC says, “What companies will have to do

According to our understanding of the legislation, cosmetics companies will have to:

* Register the company and its products with the FDA;
* Fully disclose ingredients in products (businesses that have signed the Compact for Safe Cosmetics have already agreed to do this, and hundreds of companies are already fully disclosing all ingredients, including those that make up “fragrance”);
* Pay fees based on total annual sales to ensure the FDA has the capacity to evaluate the safety of ingredients; companies with under $1 million in annual sales are exempt from fees; and
* Share safety data about product ingredients and ensure that all ingredients in the company’s products have been assessed for safety.”

As I prepare this post, I’m looking at the same legislation they are, and according to my understanding of the legislation, it seems they left a few things off of their list.

Before I get to that, I want to quickly call your attention to their statement that they only have an “understanding” of the legislation. This makes it seems like they don’t have the inside scoop — like they are reading it as an outsider, like me and you and their Compact signers are. That inference is misleading.

CFSC representatives have been in robust discussions with Rep. Jan Schakowsky’s (D-Il) office for at least the last 24 months where this legislation is concerned. To pretend like they have to interpret it like an outsider, like they only have an “understanding” of things is disingenuous at best.

* In their summary of things cosmetics companies have to do under the bill, they forgot to mention that cosmetics companies will have to:

* Register a “description of the establishment’s activities with respect to cosmetics” (Sec. 612(c)(1)(B));
* Report “the number of workers employed at the establishment” (Sec. 612(c)(1)(C));
* Report the “gross receipts of sales” (Sec. 612(c)(1)(D));
* Report “the name and address of any company that supplies the establishment … with any ingredient (including preservatives, fragrances, or any other chemical component of a finished cosmetics product) and the name of the ingredient supplied ….” (Sec. 612(c)(1)(E));

And they forgot to mention that some of this sensitive information provided by your company may be “subject to disclosure under section 552 of Title 5 of the United States Code.” (Sec. 612(e)(3));That’s the Freedom of Information Act in case you didn’t know.

How Will You Do All Of This Registering?

Don’t you already let other government officials know when you hire a new worker? And you pay into an unemployment compensation fund when you do, and you have lots of paperwork to fill out. And you have withholding and Social Security forms to complete already, yes?

A New Hire

So, let’s see what could happen if you hire someone this week, and you register that fact with the FDA. Then next week, things don’t work out and you fire her, or she quits. It’s back to the FDA database again, right? In between sorting through job applications and trying to find someone to replace her so your business can keep going, you have to report to the FDA that you no longer have 3 workers, you now have 2? And then when you hire a new worker, it’s back to the database to let the FDA know again.

I wonder if they care about that. Oh, and how does the FDA’s knowledge of when you hire and fire a worker help you make safer cosmetics?

A New Essential Oil Supplier

What if your lavender essential oil supplier can no longer supply you with oil. In addition to scrambling around to find a new supplier so you can make your products, when you finally find one and breathe a sigh of relief that you can get back to making your products, you have to go back to the FDA and register your newly found supplier, and all of their contact information?

Your Gross Receipts of Sales

You already provide the Internal Revenue Service and state authorities with information about how much money your business makes? Isn’t that paperwork enough? Why should you tell the FDA about it too?

Oh, and then, your failure to comply with all of these registration requirements can result in your removal from the database, which removal is treated as a “suspension of the establishment’s registration.” (Sec. 612 (e)(2)). So if you make a mistake or just get busy and forget to register something, your registration could be revoked, thus jeopardizing your livelihood.

These things are all omitted from CFSC’s statement.

Read It For Yourself

Don’t rely on what anyone else tells you about this law. Don’t rely on me even. Read it for yourself (PDF).

I’ll share my commentary on the rest of CFSC’s statement as I am able in the coming days, especially the part about sharing safety data. They make it seem so simple. I assure you that it is not.

Question: How many times a year does your staff turn over? How often do you have to find a new supplier for a natural ingredient? Think about how many times those things have happened at your small business in the last 12 months? Can you imagine having to report each instance to the FDA, under threat of having your cosmetics business registration revoked?

Though I built my company (Bella Lucce) from the ground up from NOTHING, I am no longer an army of one. I have to staff to make my products in our own 6,000 square foot facility. I have staff to answer client calls and process orders. I have staff to pack up shipments and accept deliveries of raw materials and track internal records and help with social media outreach and compile reports and update websites and and and…there is absolutely NO WAY, even with all that lovely, talented staff, that we could keep up with all this bill calls for us to do. And the sad fact is that most of this is just bureaucracy and precious little of it will have ANY impact on “cosmetic safety.” And the traditionally under-funded FDA will have to manage all this paperwork, which means a whole lot of new warm bodies at the FDA compound in DC. Who's gonna pay for all that? Oh yea, we will. Which means consumers will, too…

when this company started, I did everything myself- production, customer service, new product development, shipping, record keeping, EVERYTHING. In between changing diapers, taking kids to and fro and whipping up dinner each night. It was utterly overwhelming and hell to manage. There are thousands of women in that same position as I type- being mom and wives and entrepreneurs. Some of them (God love them) even holding down full-time work while they grow their dream beauty businesses at night. Tell them “it's a just a little paperwork.” Tell them to “suck it up and get it done” or get our of business. Oy vey.

How about some MEANINGFUL legislation that truly improves safety without wasting tax dollars and taxing ethical, small beauty companies right out of existence.

P.S. CFSC did, indeed, help craft this legislation. I've been to DC twice (in '08 and '09) working to defeat the draft legislation this bill was built upon and it' no secret at all amongst legislators that these “legislative suggestions” come from the hallowed halls of the Campaign or Scaring Consumers (CFSC). Anytime they tell you “Well, as we *understand* the bill…”, put your antennae up and pay very close attention. They don't “understand it” nor “interpret it.” THEY WROTE IT.

I just wanted to thank you, because the news of this bill has hit us (my husband and myself, owners of Sweet Libertine) pretty hard, and I've been able to turn off my brain every now and then to get some relief. You've kept us up to date with great information. Thank you.

Thanks Donna Maria for putting more perspective on the proposed legislation. I am sitting here at 9:30 pm still going over my list of things I need to order and receive before next week's farmers' market. I have to buy essential oils and they come from 3 or 4 different suppliers depending on the oil, the climate the past year, the politics even in particular countries – so this changes more than I like. Plus pricing of essential oils changes often and I have to keep comparing costs and suppliers – takes a lot of time and effort – now factor in the new regulations and it would be impossible. Then I move to the botanicals I need to order – again the same situation. Now I need some more emulsifying wax – and I see that one of my suppliers no longer carries my favorite type – so I have to look for someone else, check out how much shipping would be, how quickly they can ship, are they a reliable source and I want to buy as much of what I need from one supplier to save on shipping – whew! The list continues with the containers I'm running low on – etc. So as I see it, this legislation would certainly make all of this already time-consuming task even more difficult and I couldn't just make quick decisions about buying from a different supplier because they've changed what they carry – is that correct?

Thanks Donna for taking the deep dive into the impact this legislation could have on our business. Like Annrn @ Wingsets, I too have am sitting in my office on a Friday night getting ready for the market. Like lots of Indies we love what we do and are happy to have a family business. I too have multiple suppliers that I work with and I spend alot of time researching my ingredients so that I can make the freshest and purest products.

Here is a scary scenario: If I have to spend time keeping up with unneccessary databases and unneccessary regulations, then I don't have time to devote to R&D and to my family. My business becomes stale, I don't have new products and we fail. If we fail my daughter doesn't get to pursue her dreams (as she is off to college this fall).

I truly believe that those who have not 'been there, done that' with their own small business don't understand the numerous and oft'times overwhelming amount of data and paperwork you have to do to stay in business already. It doesn't sound like that big of a deal on the face of it – so you tell one more agency when you hire – but every second you're not planning, marketing, selling or manufacturing is a second wasted when you are a small business.And you're right, what if you forget? You could lose your registration? That's just not okay.

Clearly, you would not have been able to start your business if this law had been in effect. I know you were a single mom at that time, with two children aged 3 and under. Today, your company ships products all over the world, employs women in your town and supports your non-profit company's efforts to help women in third world countries. It's astounding to think of the innovation and goodwill we will never know about if this bill becomes law. Thank you for sharing some of your story, and for standing strong for yourself, your fellow Indies and all of our sons and daughters, who are the entrepreneurs of tomorrow.

That is, indeed, what this legislation calls for. You are reading it correctly. The Campaign For Safe Cosmetics is telling everyone that bills never get passed the way they are introduced. That is of course true. Lots of back and forth, meetings, hearings and mark-ups happen, and much compromising occurs before a bill becomes law. But that doesn't help you because you still have to stop everything and participate in the process or risk letting others work things out without your input.

I got a quote yesterday from a small boutique lobbying firm in Washington, DC of $10,000 per month for a year to retain their services so that our voice can be heard in a traditional sense as the debate continues. If we can find $120,000, it will be fantastic. But if we can't, and that is clearly more likely, we have two choices: (1) drop everything, including the ability to serve our customers whole-heartedly, to participate as best we can; or (2) watch from the sidelines as everyone with the resources to influence holds the fate of our businesses in their hands.

The Campaign For Safe Cosmetics knew they were putting their Compact signers, my members and multiple thousands of companies in that position when they went behind their backs to propose this legislation.

While the factual scenario I am sharing here may not be relevant to the four corners of HR 5786, it is relevant in terms of the motivation of the main special interest group behind this bill.

Donna Marie the other thing they do not tell you is specifically what type of testing would be involved to make sure your products are safe. This is the biggest thing that could put companies out of business, especially if it is required every time a batch is made. It would be cost prohibitive for many companies if this was done only once a year as well, especially if one test (or a multitude of tests for one sku) could run $5000 or more. I pressed CFSC a second time on facebook and they so far have not responded to my post. When I wrote the first time, they stated that this bill could actually benefit small businesses and referred me to a page on their site. I wrote back asking them specifically to answer my question about testing and no response…maybe I'll hear back next week, but I won't hold my breathe. I even said that this is probably the biggest concern, even more so than filling out a mind numbing amount of paperwork. I am still a signer, but getting ready to take their link off of my site. From what I have heard, asking to be removed won't get you anywhere.

I love your article! You mention everything I had mentioned in my article that got picked up by opencongress.org, and elaborate on it. Great Job!! I posted a link to THIS article on The Whisk soapmaking forum. I hope that we can keep everyone's “dander up” and annoyed so that they keep talking about it, and telling everyone they can think of, how wrong this legislation is, how the CFSC doesn't represent the views and interests of it's members, and how to go about doing something about it! Thanks again! I'll be back often!! Erinowner, The Natural Bar Soap Companyhttp://barsoapnatural.com/blog/

Thank you Donna for this article. I’m starting my company next month, making customized lotions, hand and foot creams. My company is Wild Beauty “Your Bath and Body Artisans”. My clients get to pick the ingredients they want suited for their skins needs. This bill would sink me before I even got started. The thought of testing for every single recipe that I create for my clients…it would just overwhelm me and the paperwork would bury me. I don’t support this bill. Again thank you for this very valuable information.

Good points. I hear people say all the time, things like, “Well then, if you want to sell me cosmetics, just fill out the paperwork. I don’t see what the big deal is.” Of course they don’t, because they haven’t walked a mile in the shoes of someone who is making products, filling out paperwork, marketing products, selling products, keeping customers happy, sourcing ingredients, supplies and packaging and taking care of a family too. It’s astounding and I applaud the small companies that are doing these things. They are the heroes of the American economy and lawmakers could do a lot to help pave the way for their future success and the success of future generations. Let’s hope that our efforts remind them of their responsibility to do so. Thanks for all you are doing in this effort. You’re a hero (well, “shero”) too!

Honestly, I don’t think they know what kind of testing would be required. If they did, perhaps the bill would have been introduced with more reasonable provisions. My guess is they think that Congress will just give the FDA the power to require specific testing, and that’s where we have an opportunity to make a difference — by asking lawmakers to specifically give the FDA discretion to treat small companies according to their size and not the same way multi-million (or even billion) dollar companies are treated. Thanks for your comment and I look forward to knowing if the Campaign For Safe Cosmetics ever answers your question on their FaceBook Page.

Good point, and one we are making in our advocacy. All of the unnecessary burdens actually contribute to cosmetics that are not as safe. If you have to update a database each time you make a safety improvement, you’ll make less of them. Simple.